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Is Vanguard Total Stock Market Index Investor (VTSMX) a Strong Mutual Fund Pick Right Now?
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Are you on the hunt for an Index fund? You should think about starting with Vanguard Total Stock Market Index Investor (VTSMX - Free Report) . The fund does not have a Zacks Mutual Fund Rank, though we have been able to explore other metrics like performance, volatility, and cost.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VTSMX. Vanguard Total Stock Market Index Investor debuted in April of 1992. Since then, VTSMX has accumulated assets of about $153.26 billion, according to the most recently available information. The fund is currently managed by Gerard O'Reilly who has been in charge of the fund since November of 2000.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 16.58%, and it sits in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 12.29%, which places it in the top third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. The standard deviation of VTSMX over the past three years is 19.59% compared to the category average of 15.41%. Over the past 5 years, the standard deviation of the fund is 15.76% compared to the category average of 13.02%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 1.04, the fund is likely to be more volatile than the market average. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. The fund has produced a negative alpha over the past 5 years of -0.16, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Investigating the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is primarily on equities that are traded in the United States.
As of the last filing date, the mutual fund has 92.38% of its assets in stocks, which have an average market capitalization of $239.06 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Finance
Retail Trade
Turnover is about 10%, so those in charge of the fund make fewer trades than the average comparable fund.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, VTSMX is a no load fund. It has an expense ratio of 0.14% compared to the category average of 0.80%. VTSMX is actually cheaper than its peers when you consider factors like cost.
Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.
Bottom Line
Don't stop here for your research on Index funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare VTSMX to its peers as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
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Is Vanguard Total Stock Market Index Investor (VTSMX) a Strong Mutual Fund Pick Right Now?
Are you on the hunt for an Index fund? You should think about starting with Vanguard Total Stock Market Index Investor (VTSMX - Free Report) . The fund does not have a Zacks Mutual Fund Rank, though we have been able to explore other metrics like performance, volatility, and cost.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VTSMX. Vanguard Total Stock Market Index Investor debuted in April of 1992. Since then, VTSMX has accumulated assets of about $153.26 billion, according to the most recently available information. The fund is currently managed by Gerard O'Reilly who has been in charge of the fund since November of 2000.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 16.58%, and it sits in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 12.29%, which places it in the top third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. The standard deviation of VTSMX over the past three years is 19.59% compared to the category average of 15.41%. Over the past 5 years, the standard deviation of the fund is 15.76% compared to the category average of 13.02%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 1.04, the fund is likely to be more volatile than the market average. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. The fund has produced a negative alpha over the past 5 years of -0.16, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Investigating the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is primarily on equities that are traded in the United States.
As of the last filing date, the mutual fund has 92.38% of its assets in stocks, which have an average market capitalization of $239.06 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Finance
- Retail Trade
Turnover is about 10%, so those in charge of the fund make fewer trades than the average comparable fund.Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, VTSMX is a no load fund. It has an expense ratio of 0.14% compared to the category average of 0.80%. VTSMX is actually cheaper than its peers when you consider factors like cost.
Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.
Bottom Line
Don't stop here for your research on Index funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare VTSMX to its peers as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.